03.16.2010 / Just For Kids: Saving Can Be Fun
If your children received monetary gifts over the holidays or for their birthday, they may resist saving any of it. We will share tips to help you get your kids excited about the money building potential of saving and investing, and help them start building good money habits today.
Why Start Early?
Youths spend thousands of dollars per year, yet a study by the JumpStart Coalition for Personal Financial Literacy found that 90 percent of high school graduates don’t understand the basics of personal finance. Teaching your children money management skills early on can build good lifelong habits and help them avoid financial trouble later.
Elementary School: Watch It Grow
Young children usually find learning fun, especially if you use games and visuals. Kids can literally watch their savings grow with a transparent piggy bank. Have them add coins each week for a month. Ask them to guess (or calculate) how much they’ll have at the end of four weeks if they add, say 25 cents each week. When enough coins have accumulated, exchange them for dollars to illustrate how pennies, nickels and dimes can turn into bills.
Kids also get a thrill from having their own savings account. With paper or online statements, they can watch their account grow with every deposit and see how interest increases their savings.
Middle and High School: Stock Games
You can begin teaching older children the value of investing by letting them “buy” and “sell” stocks on paper. This activity may be suitable for children as young as 10 years. Help them pick a company to invest in - maybe something they can identify with, such as a music label or their favorite fast food restaurant. Show them how to check the stock price in the newspaper or online, then help them record how much stock they’re purchasing and what the total investment is. Continue to work with them on tracking the stock on a regular basis and help them decide when to sell a stock or buy more.
Management Smarts, Starting at Age 5.
Of course, kids don’t just want to save money. They want to spend it, too. Teach them sound management skills, such as understanding the difference between needs and wants, and learning to set financial goals. For example, if your child wants to purchase a new video game, discuss with them how much the item costs and how much it will take away from their savings or how it will not allow they to purchase something else, if they decide to purchase it. Finally, have your child separate incoming money into different categories- for any-time spending, long-term purchases (such as tuition, a future car, or just a large price item), charitable giving and most importantly their SAVINGS.
More Fun, Games and Advice.
You can find many helpful resources online at the U.S. Mint’s H.I.P. Pocket Change here.
Do you have any tips that you can share with our readers? Please share them.
